JUDGMENT Chatterjee, J. - The following question of law has been referred to this Court for its opinion: Whether, on the facts and circumstances of the case, the words "subjected to excess profits tax" occurring in Rule 8 of Schedule I of the Excess Profits Tax Act, 1940, have been correctly interpreted and given effect to in disallowing the excess remuneration paid to the managing agents? 2. Messrs. Howrah Trading Co., Ltd. are the managing agents of Messrs. Naskarpara Jute Mills Co., Ltd. The managing agents were getting some remuneration, but, during the chargeable accounting period, that remuneration had been increased. The Excess Profits Tax Officer disallowed in the Applicant's excess profits tax assessment a sum of Rs. 12,000 which had been paid by the Assessee company as remuneration to its managing agents in excess of what was paid to them during the standard period. For the purpose of corresponding income tax assessment, however, the whole of the amount has been allowed as an admissible deduction. 3. Rule 8 of Schedule I of the Excess Profits Tax Act reads as follows: In the case of a business carried on by a company, if the standard profits of the company are computed by reference to the profits during a standard period, no deduction shall be allowed in respect of remuneration paid to a managing agent in excess of the amount which would have been payable to that managing agent if the agreement in force in the standard period had been in force in the chargeable accounting period, except where such remuneration is subjected to excess profits , tax in the hands of the managing agent. 4. Mr. S. Mitra, learned Counsel for the Assessee company, contended that, in this case, although there was in fact no actual levy of excess profits tax so far as the managing agents were concerned, still the remuneration payable to such managing agents was subjected to excess profits tax in the hands of the managing agents. According to him, such remuneration is brought into charge and is, therefore, subjected to excess profits tax. Mr. Mitra advanced the proposition that the taxing authorities are under the legal obligation to allow deduction for the entire remuneration paid to the managing agents, although the latter in fact were not made liable to pay any excess profits tax whatsoever. According to him, such remuneration is brought into charge and is, therefore, subjected to excess profits tax. Mr. Mitra advanced the proposition that the taxing authorities are under the legal obligation to allow deduction for the entire remuneration paid to the managing agents, although the latter in fact were not made liable to pay any excess profits tax whatsoever. This is a proposition to which I must refuse to give my assent. 5. In my view, it was not the object of the Excess Profits Tax Act to proceed on the basis of potential liability of the managing agents, when the legislature enacted Rule 8 of Schedule I. In my opinion, this rule was enacted in order to avoid double levy or double taxation under the Excess Profits Tax Act. The relevant sections and rules mean that, if the managing agents of a company are in fact made liable to pay excess profits tax, then the company itself would not be made liable to pay any such tax in so far as it pays remuneration to its agents. If the managing agents, owing to loss in respect of other items of business, do not pay any excess profits tax in spite of the larger remuneration they receive, then the company will have to pay for the same and will not be entitled to any deduction. Section 4 of the Excess Profits Tax Act is the charging section. Under that section, in respect of any business to which the Act applies, excess profits tax shall be charged, levied and paid on the amount by which the profits during any chargeable accounting period exceed the standard profits. 6. Unlike the charging section in the Indian income tax Act, the charge in respect of excess profits is on the business and not on any particular individual or individuals. In one sense it is not a personal tax, although u/s 14 the liability relating to the procedure for the recovery of the excess profits tax in respect of any chargeable accounting period is on the person carrying on the business in that period. In one sense it is not a personal tax, although u/s 14 the liability relating to the procedure for the recovery of the excess profits tax in respect of any chargeable accounting period is on the person carrying on the business in that period. Rule 7(1) and (2) of Schedule I of the Act runs as follows: 7(1) In the case of a business carried on, in any accounting period which constitutes or includes a chargeable accounting period, by a company the directors whereof have throughout that accounting period a controlling interest therein-- (a) in computing the profits for that accounting period; and (b) if the standard profits of the business are computed by reference to the profits of a standard period also in computing, in relation to any such chargeable accounting period, the profits for the standard period, no deduction shall be made in respect of directors' remuneration. (2) In Sub-rule (1) of this rule the expression "directors remuneration" does not include-- (a) the remuneration of any director who is required to devote substantially the whole of his time to the service of the company in a managerial or technical capacity and is not the beneficial owner of, or able, either directly or through the medium of other companies or by any other indirect means, to control, more than five percent, of the ordinary share capital of the company, or (b) the remuneration of any managing agent where such remuneration is included in the profits of the managing agent's business for the purposes of excess profits tax. 7. Sub-rule (2)(b) of Rule 7 seeks to place the remuneration of a managing agent, where such remuneration has been included in the profits of the managing agents' business for the purposes of excess' profits tax, practically on the same footing as the remuneration of whole-time service directors and in such cases, an allowance is made in respect of such remuneration in computing the profits of the company. Rule 7 must be read with Rule 8 which forbids the allowance of a higher rate of remuneration than what was allowed to the managing agent during the standard period. Rule 8 thus disallows, for the purpose of computation of excess profits tax, payment to the managing agent a higher rate of deduction than the rate that was, in force n the standard period. (The Excess Profits Tax Act, 1940, by Mr. Rule 8 thus disallows, for the purpose of computation of excess profits tax, payment to the managing agent a higher rate of deduction than the rate that was, in force n the standard period. (The Excess Profits Tax Act, 1940, by Mr. A.N. Aiyar, p. 162.) The object of Rule 8 is that the Managing agent's remuneration will be allowed in computing profits when the managing agents have actually been held liable or made to pay the excess profits tax, taking into account the said remuneration during the relevant period. "Subjected to excess profits tax", in my opinion, means subjected to liability or the payment of excess profits tax or subjected to the actual incidence of that tax. To accede to Mr. Mitra's ingenious argument would render Rule 8 practically nugatory. His argument s that every firm or person, who carries on a managing agency (sic), is potentially liable to be charged to excess profits tax and is thus exposed or subjected to excess profits tax. In that new, Rule 8 would be rendered inoperative practically in all cases, accept Dr. Gupta's contention that it is to avoid the double notification of excess profits tax that Rule 8 has been enacted and it cannot have any application when in the words of the revenue authorities there is "nil assessment" under the Excess Profits Tax Act, so far as the managing agents are concerned. 8. I answer the question referred to us in the affirmative and I hold that the revenue authorities were' justified in disallowing the excess remuneration paid to the managing agents as they purported to do. 9. The Assessees must pay the costs of this Reference to the Commissioner of Excess Profits Tax. Certified for two counsel. Harries C.J. 10. I agree.